Abstract:
Apartment market can be recognized as one of the marketplaces severely affected due to
the unprecedented global pandemic of COVID-19, which is currently driving towards a
disequilibrium state. Hence, this paper aimed to investigate the impact of COVID-19
pandemic on the demand and supply of apartment projects in Sri Lanka. The qualitative
research approach was followed in order to accomplish the research aim. A
comprehensive literature review followed by fifteen semi-structured interviews were
conducted with apartment industry experts during the empirical investigation. Collected
data was analyzed using manual content analysis. The findings revealed, how each
market determinant affected the demand and supply of apartments respectively during
the COVID-19 pandemic resulting numerous challenges on the market participants,
directing the apartment market towards a disequilibrium state. Urban living fears,
demographic shifts, unemployment shocks, consumers’ financial concerns, tourism
crisis along with several other factors caused demand to be dropped while approval
delays, lesser investments, lack of funding, developers’ failures, market imperfection and
construction delays majorly affect the supply of apartments. Although demand for
apartments in some market segments showed recovery with the new normal adaptation
followed by several positive market aspects, demand dropped within the rental market
and upper tier remains constantly. However, supply side is worsening overtime since
financial losses are lessening developers’ supplying capabilities, while the crisis within
the construction sector getting more affected due to the country’s economic dow
